Commission Delegated Regulation (EU) 2022/262 of 7 September 2022 amending Annex II to Regulation (EU) No 1233/2011 of the European Parliament and of the Council on the application of certain guidelines in the field of officially supported export credits

It is understood that the 2012 Recommendation applies equally to projects that are not eligible for these financial terms and conditions.

(as subsequently amended by Members of the OECD Working Group on Export Credits and Credit Guarantee (ECG) and adopted by the OECD Council):

a)

Wind energy

The maximum repayment term for jack-up rigs used in the installation of wind turbines shall be 12 years.

.

b)

Geothermal energy.

c)

Tidal and tidal stream power.

d)

Wave power.

e)

Osmotic power.

f)

Solar photovoltaic power.

g)

Solar thermal energy.

h)

Ocean thermal energy.

i)

Bio-energy: all sustainable landfill gas, sewage treatment plant gas, biogas energy or fuel derived from biomass energy installations. Biomass shall mean the biodegradable fraction of products, waste and residues from agriculture (including vegetal and animal substances), forestry and related industries, as well as the biodegradable fraction of industrial and municipal waste.

j)

Hydro power.

k)

Energy efficiency in Renewable Energies projects.

Annex

Appendix II

Climate change mitigation sectors

In the case of a plant fuelled by natural gas, significantly lower carbon intensity is expected to be achieved.

PROJECT CLASSDEFINITIONRATIONALESTANDARDS USEDREPAYMENT TERMSProject Class A: Carbon Capture Utilisation and StorageTYPE 1: Fossil Fuel Power Plants with Operational Carbon Capture Utilisation and Storage (CCUS)A process consisting of the separation of CO2 stream from the emissions produced by fossil fuel generation sources, transport to a storage site, for the purposes of environmentally safe and permanent geological storage of CO2 or use as an input or feedstock to create products or services.To achieve low carbon emission levels for fossil fuel power sources.

Carbon intensity shall achieve a level equal to or less than 350 metric ton CO2 per GWh vented to atmosphere;

Or

In the case of all projects, a capture and storage rate that would reduce the plant’s carbon emissions by 65 % or greater;

Or

The capture rate has to be at least 85 % of CO2 emitted by the equipment included in the application for officially supported export credits. The 85 % is to apply at normal operating conditions.

18 yearsProject Class A: Carbon Capture Utilisation and StorageTYPE 2: CCUS Projects as suchA process consisting of the separation of CO2 from industrial or energy generation sources, transport to a storage site, for the purposes of environmentally safe and permanent geological storage of CO2 or use as an input or feedstock to create products or services.To significantly reduce carbon emissions from existing sources.

In the case of all projects, a capture and storage rate that would reduce the industrial or energy generation carbon emissions by 65 % or greater;

Or

The capture rate has to be at least 85 % of CO2 emitted by the equipment included in the application for officially supported export credits. The 85 % is to apply at normal operating conditions.

18 years

Boiler (or steam generator) energy conversion efficiency = (Net heat exported by the steam/heat or calorific value [LHV] provided by the fuel) (× 100 %).

Gasifier efficiency = (Calorific value of gas per kg of fuel used/average net calorific value (LHV) of 1 kg of fuel) (× 100 %).

PROJECT CLASSDEFINITIONRATIONALESTANDARDS USEDREPAYMENT TERMSProject Class B: Fossil Fuel SubstitutionTYPE 1: Waste to EnergyUnit dedicated to generating energy by thermal treatment (including gasification) of mixed stream solid waste.To offset GHG emissions from the use of conventional power and by reducing future GHG such as methane that would normally emanate from the waste.

In the case of a steam cycle, a boiler (or steam generator) energy conversion efficiency of at least 75 % based on low heating value (LHV).

In the case of gasification, a gasifier efficiency of at least 65 % LHV.

15 yearsProject Class B: Fossil Fuel SubstitutionTYPE 2: Hybrid Power PlantsA power plant that generates electric power from both a renewable energy source and a fossil fuel source.To meet the requirement of plant availability, a fossil fuel generating source is required for those periods when power from the renewable energy source is not available or sufficient. The fossil fuel source enables the usage of renewable energy in the hybrid plant, thereby achieving a significant carbon reduction compared with standard fossil fuel plant.

Model 1:

Two separate generation sources: one Renewable Energy and one fossil fuel.

Project shall be designed such that at least 50 % of its projected total annual energy output originates from the plant’s renewable energy source.

Model 2:

Single generation source using the combination of renewable and fossil fuel. The project shall be designed such that at least 75 % of the useful energy produced is derived from the renewable source.

15 years

IPCC Fourth Assessment Report: Climate Change 2007, http://www.ipcc.ch/publications_and_data/ar4/wg3/en/ch4s4-3-5.html

The total system efficiency (ηo) of a CHP system is the sum of the net useful power output (WE) and net useful thermal outputs (ΣQTH) divided by the total fuel input (QFUEL), as shown below:

ηo WE ΣQTHQFUEL

PROJECT CLASSDEFINITIONRATIONALESTANDARDS USEDREPAYMENT TERMSProject Class C: Energy EfficiencyTYPE 1: Combined Heat & Power projects

Simultaneous generation of multiple forms of energy (electrical, mechanical and thermal) in a single integrated system.

Output of the CHP plant shall include electric or mechanical energy and heat for commercial industrial and/or residential use.

Up to two thirds of the primary energy used to generate electricity in conventional thermal power plants is lost in the form of heat. Combined heat and power (CHP) generation can therefore be an effective GHG mitigation option. CHP is possible with all heat machines and fuels (including biomass and solar thermal) from a few kW-rated to 1000 MW steam-condensing power plants.Overall efficiency of at least 75 % based on low heating value (LHV).15 yearsProject Class C: Energy EfficiencyTYPE 2: District heating and/or coolingNetwork which carries/distributes thermal energy from energy producing unit to end use.

To improve the efficiency of heating of districts by building piping networks for steam and/or hot water with substantial thermal efficiency, both by minimising losses of piping and converters, and by increasing the amount of utilisation of waste heat.

District cooling is an integrative technology that can make significant contributions to reducing emissions of carbon dioxide and air pollution and to increasing energy security e.g. via substitution of individual air-conditioners.

The district piping thermal conductivity shall be less than 80 % of the relevant thermal conductivity required by the European standard EN253:2009 (to be reviewed when this standard is updated).15 years

PROJECT CLASSDEFINITIONRATIONALESTANDARDS USEDREPAYMENT TERMSProject Class C: Energy EfficiencyTYPE 3: Smart Grids

Integrated, technologically advanced electricity networks with improved dynamic capabilities to monitor and control the input and output of all their constituent technical components (such as power generation, Network Management Solutions, High Voltage Direct Current (HVDC) converters and systems, Flexible Alternating Current Transmission Systems (FACTS), Special Power Systems (SPS), transmission, distribution, storage, Smart Grid Power Electronics Solutions, consumption reduction, metering, distributed energy resources).

ICT according to internationally agreed industry standards such as NIST-SGIP and ETSI-CEN-Cenelec.

To enable network operators, transmission and distribution system operators, grid users, storage owners, metering operators, applications and service providers or power exchange platform operators to create economical, environmentally-friendly, balanced and sustainable power systems with reduced transmission losses and optimised levels of supply quality, safety, grid stability, reliability, renewable power collection and cost-efficiency by supporting supply contracts involving predominantly export of state-of-the-art, innovative technologies and services.

Standards 1, 2 (a or b) and 3 shall be met.

1. The total cost of the project includes at least 20 % for eligible information and communication technology (ICT) upgrades.

2a.

An estimated minimum 10 % reduction in the amount of CO2 emissions from fossil fuel will result from the project or application, or

2b.

Demonstrated significant CO2 emission reductions will be enabled through either:

reductions in energy losses within the electricity grid served by the Smart Grid application or project by at least 5 %; or

reductions in aggregate electricity consumption by loads served by the Smart Grid application or project by at least 5 %; or

intermittent feed-in of renewable energies, including from subordinate voltage levels, representing at least an additional 10 % of the total energy fed into the grid where the smart grid technologies are applied.

1. Prior to authorisation, an independent, qualified third party will review the project and prepare a report that describes the characteristics of the proposed Smart Grid application or project and verifies whether the project or application will meet standards 1 and 2 (a or b). For projects using the 2b standard, estimated CO2 emissions reductions enabled by the project will be included in the report. Such report will be shared with Participants prior to any authorisation of financial support and authorisation will be conditional on the report positively verifying that standards 1 and 2 (a or b) will be met by the proposed Smart Grid project or application.

Standards will be measured by comparing the estimated emissions or energy use from an Area Served by the Grid if the proposed Smart Grid technologies are applied to emissions or energy use of that same area if the proposed Smart Grid technologies were not applied.

15 years

Annex

Appendix III

Eligibility criteria for climate change adaptation projects

A project is eligible for the financial terms and conditions set out in this Sector Understanding if:

a)

Climate change adaptation is the principal objective of the project, and it is explicitly indicated and explained as such in the project plan and supporting documents, as being fundamental to the design of the project.

b)

The project’s proposal shall include an analysis and identification of specific and relevant climate change-related risks and vulnerabilities, and how the proposed measures or technologies will directly address them.

c)

There is an independent third-party review conducted on the project, either separately or as an integral part of the project plan which is made publicly available, such as published on the website of the national authority. The review shall evaluate the specific and relevant climate change-related risks and vulnerabilities and how the proposed measures contained within the project will directly address them.

d)

The useful life of the project exceeds 15 years.

Annex

Appendix IV

Methodology to be used when determining the eligibility of sectors relating to Article 2 of this sector understanding

When proposing that Project Class or Type be added to Appendix II of this Sector Understanding, Participants shall provide a detailed description of the proposed Project Class or Type and information on how such projects fulfil the criteria set out in Article 2 b) of this Sector Understanding; such information shall include:

a)

An evaluation of the direct contribution of the Project Class or Type to climate change mitigation, including a comparison of the sector performance, based on measurable data regarding carbon emissions or CO2 equivalent and/or in high energy efficiency, with conventional and in-use newer technological approaches; this comparison shall, in all cases, be based on quantitative measures, such as a decrease in emissions per unit produced.

b)

A description of the technical and performance standards of the Project Class or Type proposed sector, including information on any relevant, existing Best Available Techniques (BAT); if appropriate, this description shall explain how the technology is an improvement on the existing BAT.

c)

A description of the financial barriers in the proposed Project Class or Type, including any financial needs and market conditions, and identify the provisions under this Sector Understanding that are expected to enable such projects to proceed.

Annex

Appendix V

List of definitions

Area Served by the GridA system of synchronised power providers and consumers connected by transmission and distribution lines and operated by one or more control centres.Best Available Techniques

as per the definition of EU Directive 96/61/EC (Article 2.11), Best Available Techniques shall mean the most effective and advanced stage in the development of activities and their methods of operation, which indicate the practical suitability of particular techniques for providing in principle the basis for emission limit values designed to prevent and, where that is not practicable, generally to reduce emissions and the impact on the environment as a whole:

a)

techniques shall include both the technology used and the way in which the installation is designed, built, maintained, operated and decommissioned;

b)

available techniques shall mean those developed on a scale which allows implementation in the relevant industrial sector, under economically and technically viable conditions, taking into consideration the costs and advantages, whether or not the techniques are used or produced inside the Member State in question, as long as they are reasonably accessible to the operator;

c)

best shall mean most effective in achieving a high general level of protection of the environment as a whole.

Greenhouse Gasesgreenhouse gases are defined to include carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons and sulphur hexafluoride.Large Hydro Power Projectas per the definition of the International Commission on Large Dams (ICOLD). ICOLD defines a large dam as a dam with a height of 15 m or more from the foundation. Dams that are between 5 and 15 m high and have a reservoir volume of more than 3 million m3 are also classified as large dams.

Annex

ANNEX V

SECTOR UNDERSTANDING ON EXPORT CREDITS FOR RAIL INFRASTRUCTURE

The Participants to this Sector Understanding agree that the financial terms and conditions of the Sector Understanding, which complements the Arrangement, shall be implemented in a way that is consistent with the Purpose of the Arrangement.

CHAPTER I

Scope of the sector understanding

1. SCOPE OF APPLICATION

a)

This Sector Understanding sets out the financial terms and conditions that apply to officially supported export credits relating to contracts for rail and other specified track-bound transportation infrastructure assets essential to operating trains, including control (e.g. signalling and other IT) systems, electrification, tracks, overhead wires and cables, pylons, rolling stock, cable cars, trolley buses, and related construction work.

b)

The specific types of track-bound transportation systems that are eligible for support according to the terms and conditions of this Annex are:

Any type of rail transportation system.

Trolleybus transportation systems.

Cable car transportation systems

Cable car transportation systems associated with recreational activities such as skiing are not eligible for support under this Annex.

.

CHAPTER II

Provisions for export credits

1. MAXIMUM REPAYMENT TERMS

a)

For officially supported export credits relating to contracts included within the scope of application of this Sector Understanding, the maximum repayment term is set out as follows:

For contracts in Category I countries (as defined in Article 10 of the Arrangement): 12 years.

For contacts in Category II countries (as defined in Article 10 of the Arrangement): 14 years.

b)

To qualify for the repayment terms set out in paragraph a) above, the following conditions shall apply:

The transaction shall involve an overall contract value of more than SDR 10 million; and

The repayment terms shall not exceed the useful life of the track-bound transportation infrastructure asset financed; and

For transactions in Category I countries, the transaction involves/is characterised by:

Participation in a loan syndication with private financial institutions that do not benefit from Official Export Credit Support, whereby:

i)

The Participant is a minority partner with pari passu status throughout the life of the loan; and

ii)

Official export credit support provided by the Participants comprises less than 50 % of the syndication.

Premium rates for any official support that do not undercut available private market financing and that are commensurate with the corresponding rates being charged by other private financial institutions that are participating in the syndication.

c)

A Participant may request a waiver of the condition set out in paragraph b) 3) above, through use of a Common Line, in accordance with Articles 56 to 61 of the Arrangement. In such cases, the Participant proposing the Common Line shall provide, either in the proposed Common Line or in each individual transaction thereafter notified, a comprehensive explanation for the support, including specific data on pricing, and a rationale for the need to waive the provisions of paragraph b) 3) above.

1. REPAYMENT OF PRINCIPAL AND INTEREST

The repayment of principal and interest shall be provided according to Article 15 of the Arrangement except that the maximum weighted average life of the repayment period under paragraph d) 4) of that Article shall be:

a)

For transaction in a Category I countries, six-and-a-quarter years; and

b)

For transaction in a Category II countries, seven-and-a-quarter years.

CHAPTER III

Procedures

1. PRIOR NOTIFICATION

a)

A Participant shall give prior notification in accordance with Article 45 of the Arrangement at least ten calendar days before issuing any commitment if it intends to provide support for a transaction in a Category I country. Such notifications shall include a comprehensive explanation for the official support, including specific data on pricing.

b)

A Participant shall give prior notification in accordance with Article 46 of the Arrangement at least ten calendar days before issuing any commitment if it intends to provide support for:

A transaction in a Category II country; or

A transaction supported pursuant to a Common Line set out in accordance with Article 2 c) of this Sector Understanding. Such prior notification may be made concurrently with, and subject to the approval of, the Common Line proposal.

1. VALIDITY OF COMMON LINES

Notwithstanding the provisions of Article 61 a) of the Arrangement, all agreed Common Lines shall cease to be valid on 31 December 2023, unless the Participants agree to the extension of this Sector Understanding in accordance with Article 6 d) of this Sector Understanding.

CHAPTER IV

Monitoring and review

1. MONITORING AND REVIEW

a)

The Secretariat shall report annually on the implementation of this Sector Understanding.

b)

After 31 December 2023, and subject to paragraph c) below, the less than 50 % syndication requirement set out in subparagraph ii) of the first tiret of Article 2 b) 3) of this Sector Understanding shall be replaced by a maximum 35 % syndication requirement unless the Participants agree otherwise.

c)

The Participants shall undertake a review of this Sector Understanding by the end of 2023 with a view to assessing the market conditions and other factors to determine whether the terms and conditions should be continued and or amended.

d)

After 31 December 2023, the terms and conditions of this Sector Understanding shall be discontinued unless the Participants agree otherwise.

Annex

ANNEX VI

TERMS AND CONDITIONS APPLICABLE TO PROJECT FINANCE TRANSACTIONS

CHAPTER I

General provisions

1. SCOPE OF APPLICATION

a)

This Annex sets out terms and conditions that Participants may support for project finance transactions that meet the eligibility criteria set out in Appendix 1.

b)

Where no corresponding provision exists in this Annex, the terms of the Arrangement shall apply.

CHAPTER II

Financial terms and conditions

1. MAXIMUM REPAYMENT TERMS

The maximum repayment term is 14 years, except when official export credit support provided by the Participants comprises more than 35 % of the syndication for a project in a High Income OECD country, the maximum repayment term is 10 years.

1. REPAYMENT OF PRINCIPAL AND PAYMENT OF INTEREST

The principal sum of an export credit may be repaid in unequal instalments, and principal and interest may be paid in less frequent than semi-annual instalments, as long as the following conditions are met:

a)

No single repayment of principal or series of principal payments within a six-month period shall exceed 25 % of the principal sum of the credit.

b)

The first repayment of principal shall be made no later than 24 months after the starting point of credit and no less than 2 % of the principal sum of the credit shall have been repaid 24 months after the starting point of credit.

c)

Interest shall be paid no less frequently than every 12 months and the first interest payment shall be made no later than six months after the starting point of credit.

d)

The weighted average life of the repayment period shall not exceed seven-and-a-quarter years, except when official export credit support provided by the Participants comprises more than 35 % of the syndication for a project in a High Income OECD country, the weighted average life of the repayment period shall not exceed five-and-a-quarter years.

e)

The Participant shall give prior notification according to Article 4 of this Annex.

CHAPTER III

Procedures

1. PRIOR NOTIFICATION FOR PROJECT FINANCE TRANSACTIONS

A Participant shall notify all Participants of the intent to provide support according to the terms and conditions of this Annex at least ten calendar days before issuing any commitment. The notification shall be provided in accordance with Annex VII of the Arrangement. If any Participant requests an explanation in respect of the terms and conditions being supported during this period, the notifying Participant shall wait an additional ten calendar days before issuing any commitment.

Annex

Appendix 1

Eligibility criteria for project finance transactions

I.

BASIC CRITERIA

The transaction involves/is characterised by:

a)

The financing of a particular economic unit in which a lender is satisfied to consider the cash flows and earnings of that economic unit as the source of funds from which a loan will be repaid and to the assets of the economic unit as collateral for the loan.

b)

Financing of export transactions with an independent (legally and economically) project company, e.g. special purpose company, in respect of investment projects generating their own revenues.

c)

Appropriate risk-sharing among the partners of the project, e.g. private or creditworthy public shareholders, exporters, creditors, off-takers, including adequate equity.

d)

Project cash flow sufficient during the entire repayment period to cover operating costs and debt service for outside funds.

e)

Priority deduction from project revenues of operating costs and debt service.

f)

A non-sovereign buyer/borrower with no sovereign repayment guarantee (not including performance guarantees, e.g. off-take arrangements).

g)

Asset-based securities for proceeds/assets of the project, e.g. assignments, pledges, proceed accounts;

h)

Limited or no recourse to the sponsors of the private sector shareholders/sponsors of the project after completion.

II.

ADDITIONAL CRITERIA FOR PROJECT FINANCE TRANSACTIONS IN HIGH INCOME OECD COUNTRIES

The transaction involves/is characterised by:

a)

Participation in a loan syndication with private financial institutions that do not benefit from Official Export Credit Support, whereby:

The Participant is a minority partner with pari passu status throughout the life of the loan, and

Official export credit support provided by the Participants comprises less than 50 % of the syndication.

b)

Premium rates for any official support that do not undercut available private market financing and that are commensurate with the corresponding rates being charged by other private financial institutions that are participating in the syndication.

Annex

ANNEX VII

INFORMATION TO BE PROVIDED FOR NOTIFICATIONS

The information listed in Section I below shall be provided for all notifications made under the Arrangement (including its Annexes). In addition, the information specified in Section II shall be provided, as appropriate, in relation to the specific type of notification being made.

I.

INFORMATION TO BE PROVIDED FOR ALL NOTIFICATIONS

a)

Basic information

1. Notifying country

1. Date of notification

1. Notifying institution/authority/agency

1. ECA(s) extending official export credit support

a.

ECA providing insurance/guarantee support

b.

ECA providing finance support

1. Notification number

1. Identification codes (internal)

1. Credit line reference number (if relevant)

1. Status (e.g. original, revision, replacement)

1. Revision number (if relevant)

1. Arrangement Article(s) under which notification is being made

1. Reference number of notification matched (if relevant)

1. Description of support being matched (if relevant)

1. Destination country

b)

Buyer/borrower/guarantor information

1. Buyer name

1. Buyer country

1. Buyer location (if known)

1. Buyer status

1. Buyer type

1. Borrower name (if the borrower is not the buyer)

1. Borrower country (if the borrower is not the buyer)

1. Borrower location (if the borrower is not the buyer)

1. Borrower status (if the borrower is not the buyer)

1. Borrower type (if the borrower is not the buyer)

1. Guarantor name (if relevant)

1. Guarantor country (if relevant)

1. Guarantor location (if relevant)

1. Guarantor status (if relevant)

1. Guarantor type (if relevant)

c)

Information on goods and/or services being exported and the project

1. Detailed description of the products and/or services being exported

1. Detailed description of the project (or sector) for which the exports are being provided

1. Suggested purpose code

1. Location of the project (if known)

1. Tender closing date (if relevant)

1. Expiry date of credit line (if relevant)

1. Value of contract(s) supported, according to the following scale in millions of SDRs:

Indicate the number of SDR 40 million multiples in excess of SDR 280 million, e.g. SDR 410 million would be notified as Category XV+3.

CategoryFromToI:01II:12III:23IV:35V:57VI:710VII:1020VIII:2040IX:4080X:80120XI:120160XII:160200XIII:200240XIV:240280XV:280

1. Value of contract(s) supported, actual amount (in contract currency)

1. Currency of contract(s)

d)

Financial terms and conditions of the official export credit support

The following information should be provided in respect of each tranche supported for transactions comprising multiple tranches with different financial terms and conditions.

1. Credit value, SDR scale

1. Credit value, actual amount (optional in lieu of item 38)

1. Credit currency

1. Down payment (% export contract value)

1. Local costs (% export contract value)

1. SPOC determined according to (with reference to Annex XIV definition q)

1. Length of the repayment period

1. Length of repayment period units

1. Interest rate base

1. Interest rate or margin above base

1. Comments, notes and/or explanations regarding the information provided in Section I

II.

ADDITIONAL INFORMATION TO BE PROVIDED, AS APPROPRIATE, FOR NOTIFICATIONS MADE IN RELATION TO SPECIFIC PROVISIONS

a)

Chapter II Article 12 d) 3)

The following information should be provided in respect of each tranche supported for transactions comprising multiple tranches with different financial terms and conditions.

1. Type of local costs supported

1. Nature of local costs supported: Capital equipment?

1. Nature of local costs supported: Deliveries from local subsidiaries and/or affiliates?

1. Nature of local costs supported: Local construction or installation costs?

1. Nature of local costs supported: VAT, import duties, other taxes?

1. Nature of local costs supported: Other?

1. Description of other local costs

1. Comments, notes and/or explanations regarding the information provided in Section II.a.

b)

Chapter II Article 15 c) 5), Annex I Article 5 e), Annex II Article 6 a), Annex II Article 6 b), Annex IV Article 8 d), Annex VI Article 4

1. Repayment profile

1. Repayment frequency (principal)

1. Repayment frequency (interest)

1. First principal repayment after SPOC

1. First principal repayment after SPOC units

1. Amount of interest capitalised before the SPOC

1. Capitalised interest currency

1. Weighted average life of the repayment period

1. Percentage principal repaid by mid-point of credit

1. Explanation of the reason for not providing support according to standard repayment structures

1. Comments, notes and/or explanations regarding the information provided in Section II.b.

c)

All notification obligations in Chapter II Articles 23, 26, 28, 29, Annex VI Article 4 (only for projects in high Income OECD countries) and Annex V Article 4a)

1. Country risk classification of the obligor’s country

1. Application of an offshore future flow structure combined with an offshore escrow account? (Categories 1–7 only)

1. The applicable country and buyer risk categories are related to the (buyer, borrower, guarantor, project, transaction)

1. Applicable country risk classification

1. Applicable buyer risk category

1. Does the entity indicated in #70 have a foreign currency rating from an accredited credit rating agency (CRA)?

1. Most favourable accredited CRA foreign currency rating for the entity indicated in #70

1. Accredited CRA providing the rating reported in #74

1. Basis for applicable Minimum Premium Rate (MPR)

1. Basis for actual premium rate charged

1. Comments, notes and/or explanations regarding the basis for the actual premium rate charged

1. Length of the drawdown period

1. Length of drawdown period units

1. Percentage of cover for political (country) risk

1. Percentage of cover for commercial (buyer) risk

1. Official export credit product

1. Interest covered during claims waiting period?

1. MPR (based on item 76) country risk mitigation or buyer risk credit enhancements

1. Local currency financing? (Cat 1–7 MPRs only)

1. Local currency factor (LCF) applied

1. Buyer risk credit enhancements?

1. Total credit enhancement factor (CEF) applied

1. Applicable MPR (based on item 76) after any country risk mitigation or buyer risk credit enhancements

1. Actual premium rate charged

1. Comments, notes and/or explanations regarding the information provided in Section II.c.

d)

Arrangement, Article 26 e) first tiret

1. Explanation of the characteristics of the obligor against the criteria for Buyer Risk Category CC0 in Annex XII of the Arrangement

e)

Arrangement, Article 26 e) second tiret

1. Rationale for buyer risk category better than accredited CRA rating

f)

Arrangement, Article 23 c) 2)

1. Type of name-specific or related entity debt instrument used to set premium

1. Name of the debt instrument entity

1. Detailed description and key characteristics of the debt instrument and the methodology used to derive the pricing, including (but not limited to) information about the tenor, credit profile, liquidity and currency of the instrument

1. Relationship between the transaction obligor/guarantor and the related entity

1. Does the transaction obligor/guarantor have the same issuer CRA rating as the related entity?

1. Does the related entity meet all of the criteria listed in Annex XIV (definition o) of the Arrangement?

1. Detailed explanation of how the criteria that define a related entity have been met

g)

Arrangement, Article 46 a) 7)

1. Justification for the buyer risk classification

1. Best accredited CRA foreign currency rating for the sovereign in the obligor’s/guarantor’s domicile (If the applicable buyer risk category is more favourable than the best accredited CRA rating of the sovereign in the obligor’s/guarantor’s domicile for an unrated obligor)

1. Accredited CRA providing the rating reported in #103

h)

Arrangement, Article 23 c) 1)

1. Is syndicated loan package structured as either an asset-backed or project finance transaction?

1. Do commercial market loans/guarantees without any bilateral or multilateral support comprise at least 25 % of the syndicate?

1. Are all parties to the financing on pari passu terms on all financial terms and conditions, including the security package?

1. Are the financial terms and conditions of the transaction fully compliant with the Arrangement, as modified by the provisions for Market Benchmark pricing in syndicated loans/guarantees transactions?

1. Detailed description of the methodology used to derive the premium (or all-in cost for direct lending) reported in item 91

1. Comments, notes and/or explanations regarding the information provided in Section II.d.

i)

Arrangement, Article 23 h)

1. Does the guarantee cover the entire duration of the debt?

1. Is the guarantee irrevocable, unconditional and available on demand?

1. Is the guarantee legally valid and capable of being enforced in the guarantor country’s jurisdiction?

1. Is the guarantor creditworthy in relation to the size of the guaranteed debt?

1. Is the guarantor subject to the monetary control and transfer regulations of the country in which it is located?

1. Percentage of the total amount at risk (i.e. principal and interest) that is covered by the guarantee

1. Does any financial relationship exist between the guarantor and the obligor?

1. Type of relationship

1. Is the guarantor legally and financially independent and can it fulfil the obligor’s payment obligation?

1. Would the guarantor be affected by events, regulations or sovereign intervention in the obligor’s country?

1. Comments, notes and/or explanations regarding the information provided in Section II.e.

j)

Arrangement, Article 28 b)

For the application of an offshore future flow structure combined with an offshore escrow account:

1. – 132.

Confirmation that the criteria listed in Annex XIII have been met

1. Information on additional factors taken into consideration and/or any other comments regarding the application of an offshore future flow structure combined with an offshore escrow account

For local currency financing:

1. – 139.

Confirmation that the criteria listed in Annex XIII have been met

1. Local currency used

1. Information on additional factors taken into consideration and/or any other comments regarding the application of local currency financing

1. Comments, notes and/or explanations regarding the information provided in Section II.f.

k)

Arrangement, Article 29 d)

1. – 150.

The specific buyer risk credit enhancements and corresponding credit enhancement factors applied

1. Comments, notes and/or explanations regarding the information provided in Section II.g.

l)

Annex V, Article 4

1. Does the repayment term supported exceed the useful life of the track-bound transportation infrastructure asset financed?

1. Comments (regarding item 152)

For all transactions involving Category I countries:

1. Comprehensive explanation for provision of official support

1. Has a waiver of the conditions set out in Article 2, Paragraph b) 3) of Annex V been requested via a common line?

1. Common line status

1. Comments, notes and/or explanations regarding any common line

m)

Annex VI, Article 4

1. Explanation of why project finance terms are being provided

1. Contract value in relation to turnkey contract, portion of sub-contracts, etc.

1. Type of cover provided prior to SPOC

1. Percentage of cover for political risk prior to SPOC

1. Percentage of cover for commercial risk prior to SPOC

1. Type of cover provided after SPOC

1. Percentage of cover for political risk after SPOC

1. Percentage of cover for commercial risk after SPOC

1. Length of the construction period

1. Length of construction period units

1. – 183.

Confirmation (and explanation as necessary) that the transaction meets the criteria listed in Appendix I of Annex VI

n)

Annex VI, Article 4 and Annex V Article 4 a) for projects in High Income OECD Countries

1. Total debt syndication amount for the project, including official and private lenders

1. Total debt syndication currency

1. Percentage of debt syndication from Participants to the Arrangement

1. Percentage of the debt syndication from private lenders

1. Minority partner in loan syndication?

1. Comments (regarding item 195)

1. Premium rate meets market criteria?

1. Comments (regarding item 197)

1. Comments, notes and/or explanations regarding the information provided in Section II.h.

o)

Arrangement, Articles 47 and 48

1. Total amount of trade-related aid, SDR scale

1. Composition of trade-related aid package: share of non-concessional export credits in conformity with the Arrangement

1. Composition of trade-related aid package: share of other funds at or near market rates

1. Composition of trade-related aid package: share of other official funds with a concessionality level of less than the minimum permitted under Article 35 except in cases of matching

1. Composition of trade-related aid package: share of down payment from the purchaser

1. Composition of trade-related aid package: share of payments on or before the starting point of credit that are not considered

1. Composition of trade-related aid package: share of grants

1. Composition of trade-related aid package: share of concessional credits

1. Terms and conditions of concessional credits: grace period

1. Terms and conditions of concessional credits: length of repayment period

1. Terms and conditions of concessional credits: repayment frequency

1. Terms and conditions of concessional credits: repayment profile

1. Terms and conditions of concessional credits: currency

1. Terms and conditions of concessional credits: interest rate

1. Terms and conditions of concessional credits: applicable DDR

1. Terms and conditions of concessional credits: concessionality level

1. Overall concessionality level of the trade-related aid package

1. Comments, notes and/or explanations regarding the information provided in Section II. k)

Annex

ANNEX VIII

CALCULATION OF THE MINIMUM PREMIUM RATES FOR COUNTRY RISK CATEGORY 1–7 TRANSACTIONS

MPR Formula

The formula for calculating the applicable MPR for an export credit involving an obligor/guarantor in a country classified in Country Risk Categories 1–7 is:

MPR = {[(ai HOR + bi) max (PCC, PCP)/0,95] (1-LCF) + [cin PCC/0,95 HOR (1-CEF)]} QPFi PCFi BTSF

where:

—aicountry risk coefficient in country risk category i (i = 1–7)—cinbuyer risk coefficient for buyer category n (n = SOV+, SOV/CCO, CC1-CC5) in country risk category i (i = 1–7)—biconstant for country category risk category i (i = 1–7)—HORhorizon of risk—PCCcommercial (buyer) risk percentage of cover—PCPpolitical (country) risk percentage of cover—CEFcredit enhancements factor—QPFiquality of product factor in country risk category i (i = 1–7)—PCFipercentage of cover factor in country risk category i (i = 1–7)—BTSFbetter than sovereign factor—LCFlocal currency factor

Applicable Country Risk Classification

The applicable country risk classification is determined according to Article 23 e) of the Arrangement, which in turn determines the country risk coefficient (ai) and constant (bi) that are obtained from the following table:

1234567a0,0900,2000,3500,5500,7400,9001,100b0,3500,3500,3500,3500,7501,2001,800

Selection of the Appropriate Buyer Risk Category

The appropriate buyer risk category is selected from the following table, which provides the combinations of country and buyer risk categories that have been established and the agreed concordance between buyer risk categories CC1–CC5 and the classifications of accredited CRAs. Qualitative descriptions of each buyer risk category (SOV+ to CC5) have been established to facilitate the classification of obligors (and guarantors) and are provided in Annex XII.

Country Risk Category1234567SOV+SOV+SOV+SOV+SOV+SOV+SOV+SOV/CC0SOV/CC0SOV/CC0SOV/CC0SOV/CC0SOV/CC0SOV/CC0

CC1

AAA to AA-

CC1

A+ to A-

CC1

BBB+ to BBB-

CC1

BB+ to BB

CC1

BB-

CC1

B+

CC1

B

CC2

A+ to A-

CC2

BBB+ to BBB-

CC2

BB+ to BB

CC2

BB-

CC2

B+

CC2

B

CC2

B- or worse

CC3

BBB+ to BBB-

CC3

BB+ to BB

CC3

BB-

CC3

B+

CC3

B

CC3

B- or worse

CC4

BB+ to BB

CC4

BB-

CC4

B+

CC4

B

CC4

B- or worse

CC5

BB- or worse

CC5

B+ or worse

CC5

B or worse

CC5

B- or worse

The selected buyer risk category, in combination with the applicable country risk category determines the buyer risk coefficient (cin) that is obtained from the following table:

Buyer Risk

Category

Country Risk Category1234567SOV+0,0000,0000,0000,0000,0000,0000,000SOV/CC00,0000,0000,0000,0000,0000,0000,000CC10,1100,1200,1100,1000,1000,1000,125CC20,2000,2120,2230,2340,2460,2580,271CC30,2700,3200,3200,3500,3800,480n/aCC40,4050,4590,4950,5400,621n/an/aCC50,6300,6750,7200,810n/an/an/a

Horizon of Risk (HOR)

The Horizon of Risk (HOR) is calculated as follows:

For standard repayment profiles (i.e. equal semi-annual repayments of principal):

HOR = (length of the disbursement period 0,5) + the length of the repayment period

For non-standard repayment profiles:

HOR = (length of the disbursement period 0,5) + (weighted average life of the repayment period – 0,25)/0,5

In the above formulas, the unit of measurement for time is years.

Percentage of Cover for Commercial (Buyer) Risk (PCC) and Political (Country) Risk (PCP)

The Percentages of Cover (PCC and PCP) expressed as a decimal value (i.e. 95 % is expressed as 0,95) in the MPR formula.

Buyer Risk Credit Enhancements

The value of the credit enhancement factor (CEF) is 0 for any transaction that is not subject to any buyer risk credit enhancements. The value of the CEF for transactions that are subject to buyer risk credit enhancements is determined according to Annex XII, subject to the restrictions set out in Article 29 c) of the Arrangement and may not exceed 0,35.

Quality of Product Factor (QPF)

The QPF is obtained from the following table:

Product QualityCountry Risk Category1234567Below Standard0,99650,99350,98500,98250,98250,98000,9800Standard1,00001,00001,00001,00001,00001,00001,0000Above Standard1,00351,00651,01501,01751,01751,02001,0200

Percentage of Cover Factor (PCF)

The PCF is determined as follows:

For (max(PCC, PCP) ≤ 0,95, PCF = 1)

For (max(PCC, PCP) > 0,95, PCF = 1 + ((max(PCC, PCP) – 0,95)/0,05) (percentage of cover coefficient)

The percentage of cover coefficient is obtained from the following table:

Country Risk Category1234567Percentage of cover coefficient0,000000,003370,004890,016390,036570,058780,08598

Better than Sovereign Factor (BTSF)

When an obligor is classified in the better than sovereign (SOV+) buyer risk category, BTSF = 0,9, otherwise BTSF = 1.

Local Currency Factor (LCF)

For transaction making use of local currency country risk mitigation, the value of the LCF may not exceed 0,2. The value of the LCF for all other transactions is 0.

Annex

ANNEX IX

PREMIUM BENCHMARKS FOR MARKET BENCHMARK TRANSACTIONS

Un-covered Tranche of Export Credits or the non-ECA Covered Part of a Syndicated Loan

The price indicated by private banks/institutions with respect to the uncovered tranche of the export credit in question (or sometimes as the non-ECA covered part of a syndicated loan) may represent the best match to ECA cover. Pricing on such un-covered portions or non-covered parts should only be used if provided on commercial terms (e.g. this would exclude IFI funded portions).

Name-Specific Corporate Bonds

Corporate bonds reflect name specific credit risk. Care should be used in matching in terms of the ECA contract characteristics, such as term of maturity, and currency denomination, and any credit enhancements. If primary corporate bonds (i.e. all-in yield upon issuance) or secondary corporate bonds (i.e. the option adjusted spread over the appropriate curve, which is usually the relevant currency swap curve) are used, those for the obligor should be used in the first instance; if not available, primary or secondary corporate bonds from Related Entities may be used.

Name-Specific Credit Default Swaps

Credit Default Swaps (CDS) are a form of protection against default. The CDS spread is the amount paid per period by the buyer of the CDS as a percentage of notional principal, and is usually expressed in basis points. The CDS buyer effectively buys insurance against default by making payments to the seller of the CDS for the life of the swap, or until the credit event occurs. A CDS curve for the obligor should be used in the first instance; if not available, CDs curves from Related Entities may be used.

Loan Benchmarks

Primary loan benchmarks (i.e. pricing upon issuance) or secondary loan benchmarks (i.e. the current yield on the loan expected by the financial institution purchasing the loan from another financial institution). All fees must be known for primary loan benchmarks so that the all-in yield can be calculated. If loan benchmarks are used, those for the obligor should be used in the first instance; if not available, those from similar entities may be used.

Benchmark Market Curves

Benchmark market curves reflect the credit risk of a whole sector or class of buyers. This market information may be relevant when name specific information is not available. In general, the quality of the information inherent to these markets depends upon their liquidity. In any case, one should look for market instruments that provide the closest match in terms of the ECA contract characteristics, such as date, credit rating, term of maturity, and currency denomination.

Annex

ANNEX X

CRITERIA AND CONDITIONS GOVERNING THE APPLICATION OF A THIRD PARTY REPAYMENT GUARANTEE AND THE CRITERIA FOR ASSESSING MULTILATERAL OR REGIONAL INSTITUTIONS

PURPOSE

This Annex provides the criteria and conditions that govern the application of third party repayment guarantees according to Article 23 e) of the Arrangement. It also provides the criteria by which multilateral or regional institutions should be assessed when determining if an institution should be subject to the premium rules for Market Benchmark Transactions in Article 23 c) of the Arrangement.

APPLICATION

Case 1: Guarantee for the Total Amount at Risk

When security in the form of a repayment guarantee from an entity is provided for the total amount at risk (i.e. principal and interest), the applicable Country Risk Classification and Buyer Risk Category may be that of the guarantor when the following criteria are met:

The guarantee covers the entire duration of the credit.

The guarantee is irrevocable, unconditional and available on-demand.

The guarantee is legally valid and capable of being enforced in the guarantor country’s jurisdiction.

The guarantor is creditworthy in relation to the size of the guaranteed debt.

The guarantor is subject to the monetary control and transfer regulations of the country in which it is located, except when the guarantor is a multilateral institution that the Participants have agreed is generally exempt from such controls and limitations.

If the guarantor is a subsidiary/parent of the guaranteed entity, Participants shall, on a case-by-case basis, determine whether: (1) in consideration of the relationship between the subsidiary/parent and the degree of legal commitment of the parent, the subsidiary/parent is legally and financially independent and could fulfil its payment obligations; (2) the subsidiary/parent could be affected by local events/regulations or sovereign intervention; and (3) the Head Office would in the event of a default regard itself as being liable.

Case 2: Guarantee Limited in Amount

When security in the form of a repayment guarantee from an entity is provided for a limited amount at risk (i.e. principal and interest), the applicable Country Risk Classification and Buyer Risk Category may be that of the guarantor for the portion of the credit subject to the guarantee, providing that all other relevant criteria listed under Case 1 are met.

For the unguaranteed portion, the applicable Country Risk Classification and Buyer Risk Category is that of the obligor.

Criteria for the Assessment of Multilateral or Regional Institutions

The Participants may agree that a multilateral or regional institution is subject to the premium rules for Market Benchmark Transaction in Article 23 c) if the institution is generally exempt from the monetary control and transfer regulations of the country in which it is located. Such institutions shall be assessed on a case-by-case basis on their own merits and in consideration of whether:

the institution has statutory and financial independence;

all of the institution’s assets are immune from nationalisation or confiscation;

the institution has full freedom of transfer and conversion of funds;

the institution is not subject to government intervention in the country where it is located;

the institution has tax immunity; and

there is an obligation of all its Member countries to supply additional capital to meet the institution’s obligations.

The assessment should also take into consideration the historical payment record in situations of country credit risks default either in the country where it is located or in an obligor’s country, and any other factors that may be deemed appropriate in the assessment process.

The list of such multilateral and regional institutions is not closed and a Participant may nominate an institution for review according to the above-listed considerations. The list of multilateral and regional institutions that are subject to the premium rules for Market Benchmark Transaction in Article 23 c) shall be made public by the Participants.

Annex

ANNEX XI

BUYER RISK CATEGORIES QUALITATIVE DESCRIPTIONS

Better than Sovereign (SOV+)

This is an exceptional classification. The entity achieving such a classification is one with an exceptionally strong credit profile that could be expected to fulfil its payment obligations during a period of sovereign debt distress or even default. International Credit Rating Agencies issue regular reports listing Corporate and Counterparty Ratings that exceed the Sovereign’s Foreign Currency Rating. Except when the risk sovereign has been identified through the Sovereign Risk Assessment Methodology as being significantly higher than country risk, Participants proposing that an entity be classified as better than sovereign shall reference such better than sovereign ratings in support of their recommendation. In order to be classified as better than its host sovereign, an entity would be expected to display several or normally a majority of the following characteristics or equivalents:

a strong credit profile;

substantial foreign exchange earnings relative to its currency debt burden;

production facilities and cash generation ability from subsidiaries or operations offshore, especially those domiciled in highly rated sovereigns, i.e. multinational enterprises;

a foreign owner or a strategic partner which could be relied on as a source of financial support in the absence of a formal guarantee;

a history of preferential treatment of the entity by the sovereign, including exemption from transfer and convertibility constraints and surrender requirements for export proceeds, and favourable tax treatment;

committed credit lines from highly rated international banks, especially credit lines without a material adverse change (MAC) clause which enable banks to withdraw committed facilities in the event of a sovereign crisis or other risk events; and

assets held offshore, especially liquid assets, often as a result of rules allowing exporters to trap and maintain cash balances offshore that are available for debt service.

Normally the SOV+ buyer risk category is not applicable to:

publicly-owned entities and utilities, sub-sovereigns as line ministries, regional governments, etc.;

financial institutions domiciled in the sovereign’s jurisdiction; and

entities primarily selling to the domestic market in local currency.

Sovereign (SOV)

Sovereign obligors/guarantors are entities that are explicitly legally mandated to enter into a debt payment obligation on the behalf of the Sovereign State, typically Ministry of Finance or central bank

Most typically this would be a risk on the central bank or Ministry of Finance. For central government entities other than the finance ministry, due diligence shall be undertaken to affirm that the entity commits the full faith and credit of the sovereign.

. A risk designated as sovereign is one where:

the obligor/guarantor is legally mandated to enter into a debt payment obligation on behalf of the Sovereign and thereby commits the full faith and credit of the sovereign; and

in the event of rescheduling of sovereign risk, the debt in question would be included in the rescheduling and payment obligations acquired by the sovereign by virtue of the rescheduling.

Equivalent to the Sovereign (CC0): Exceptionally Good Credit Quality

The equivalent to sovereign category embraces two basic types of obligors/guarantors:

Public entities where due diligence reveals that either the buyer has the implicit full faith and credit/support of the sovereign or that the likelihood of sovereign liquidity and solvency support is very high, both in relation to recovery prospects as well as default risk. Non-sovereign public entities equivalent to the sovereign would also include companies owned by the government with a monopoly or near monopoly on operations in a sector (e.g. power, oil, gas).

Corporate entities with an exceptionally strong credit profile, displaying features in terms of both default and recovery prospects, which indicate that the risk could be seen as being equivalent to sovereign. Candidates could include strong blue chip corporates or very important banks for which the likelihood of sovereign liquidity and solvency support is high.

Exceptionally good credit quality implies that the risk of payment interruption is expected to be negligible and that the entity has an exceptionally strong capacity for repayment and this capacity is not likely to be affected by foreseeable events. The credit quality is typically manifested in a combination of some, if not all, of the following characteristics of the entity’s business and financial profile:

exceptionally good to very good cash and income generation

exceptionally good to very good liquidity levels

exceptionally low to very low leverage

excellent to very strong business profile with proven and very strong management abilities

The entity is also characterised by a high quality of financial and ownership disclosure, unless there is a very high likelihood of support from a parent (or sovereign) with a buyer risk classification that is equal to or better than what corresponds to this buyer risk category.

Depending on the classification of the country in which the obligor/guarantor is domiciled, it is likely that an obligor/guarantor classified in buyer risk category CC0 would be rated between AAA (Country Category 1) and B (Country Category 7) by accredited CRAs.

Very Good Credit Quality (CC1)

The risk of payment interruption is expected to be low or very low. The obligor/guarantor has a very strong capacity for repayment and this capacity is not likely to be affected by foreseeable events. The obligor/guarantor has a limited or very limited susceptibility to adverse effects of changes in circumstances and economic conditions. The credit quality is typically manifested in a combination of some, if not all, of the following characteristics of the business and financial profile:

very good to good cash and income generation

very good to good liquidity levels

very low to low leverage

very strong business profile with proven management abilities

The entity is also characterised by a high quality of financial and ownership disclosure, unless there is a very high likelihood of support from a parent (or sovereign) with a buyer risk classification that is equal to or better than what corresponds to this buyer risk category.

Depending on the classification of the country in which the obligor/guarantor is domiciled, it is likely that an obligor/guarantor classified in buyer risk category CC1 would be rated between AAA (Country Category 1) and B (Country Category 7) by accredited CRAs.

Good to Moderately Good Credit Quality, Above Average (CC2)

The risk of payment interruption is expected to be low. The obligor/guarantor has a good to moderately good capacity for repayment and this capacity is not likely to be affected by foreseeable events. The obligor/guarantor has a limited susceptibility to adverse effects of changes in circumstances and economic conditions. The credit quality is typically manifested in a combination of some, if not all, of the following characteristics of the business and financial profile:

good to moderately good cash and income generation

good to moderately good liquidity levels

low to moderately low leverage

moderately strong business profile with proven management abilities

The entity is also characterised by a high quality of financial and ownership disclosure, unless there is a very high likelihood of support from a parent (or sovereign) with a buyer risk classification that is equal to or better than what corresponds to this buyer risk category.

Depending on the classification of the country in which the obligor/guarantor is domiciled, it is likely that an obligor/guarantor classified in buyer risk category CC2 would be rated between A+ (Country Category 1) and B- or worse (Country Category 7) by accredited CRAs.

Moderate Credit Quality, Average (CC3)

The risk of payment interruption is expected to be moderate or moderately low. The obligor/guarantor has a moderate or moderately good capacity for repayment. There is a possibility of credit risk developing as the obligor/guarantor faces major ongoing uncertainties or exposure to adverse business, financial or economic conditions which could lead to inadequate capacity to meet timely payments. However, business or financial alternatives may be available to allow financial commitments to be met. The credit quality is typically manifested in a combination of some, if not all, of the following characteristics of the business and financial profile.

moderately good to moderate cash and income generation

moderately good to moderate liquidity levels

moderately low to moderate leverage

moderate business profile with proven management abilities

The entity is also characterised by an adequate quality of financial and ownership disclosure, unless there is a very high likelihood of support from a parent (or sovereign) with a buyer risk classification that is equal to or better than what corresponds to this buyer risk category.

Depending on the classification of the country in which the obligor/guarantor is domiciled, it is likely that an obligor/guarantor classified in buyer risk category CC3 would be rated between BBB+ (Country Category 1) and B- or worse (Country Category 6) by accredited CRAs.

Moderately Weak Credit Quality, Below Average (CC4)

The risk of payment interruption is expected to be moderately weak. The obligor/guarantor has a moderate to moderately weak capacity for repayment. There is a possibility of credit risk developing as the obligor/guarantor faces major ongoing uncertainties or exposure to adverse business, financial or economic conditions which could lead to inadequate capacity to meet timely payments. However, business or financial alternatives may be available to allow financial commitments to be met. The credit quality is typically manifested in a combination of some, if not all, of the following characteristics of the business and financial profile:

moderate to moderately weak cash and income generation

moderate to moderately weak liquidity levels

moderate to moderately high leverage

moderately weak business profile with limited track record of management abilities

The entity is also characterised by an adequate quality of financial and ownership disclosure, unless there is a very high likelihood of support from a parent (or sovereign) with a buyer risk classification that is equal to or better than what corresponds to this buyer risk category.

Depending on the classification of the country in which the obligor/guarantor is domiciled, it is likely that an obligor/guarantor classified in buyer risk category CC4 would be rated between BB+ (Country Category 1) and B- or worse (Country Category 5) by accredited CRAs.

Weak Credit Quality (CC5)

The risk of payment interruption is expected to be high to very high. The obligor/guarantor has a moderately weak to weak capacity for repayment. The obligor/guarantor currently has the capacity to meet repayments but a limited margin of safety remains. However, there is a likelihood of developing payment problems as the capacity for continued payment is contingent upon a sustained, favourable business and economic environment. Adverse business, financial, or economic conditions will likely impair capacity or willingness to repay. The credit quality is typically manifested in a combination of some, if not all, of the following characteristics of the business and financial profile:

moderately weak to weak to very weak cash and income generation

moderately weak to weak liquidity levels

moderately high to high leverage

weak business profile with limited or no track record of management abilities

The entity is also characterised by a poor quality of financial and ownership disclosure, unless there is a very high likelihood of support from a parent (or sovereign) with a buyer risk classification that is equal to or better than what corresponds to this buyer risk category.

Depending on the classification of the country in which the obligor/guarantor is domiciled, it is likely that an obligor/guarantor classified in buyer risk category CC5 would be rated between BB- (Country Category 1) and B- or worse (Country Category 4) by accredited CRAs.

Annex

ANNEX XII

CRITERIA AND CONDITIONS GOVERNING THE APPLICATION OF COUNTRY RISK MITIGATION TECHNIQUES AND BUYER RISK CREDIT ENHANCEMENTS

PURPOSE

This Annex provides detail on the use of country risk mitigation techniques listed in Article 28 a) of the Arrangement and the buyer risk credit enhancements listed in Article 29 a) of the Arrangement; this includes the criteria, conditions and specific circumstances which apply to their use as well as the impact on the MPRs.

COUNTRY RISK MITIGATION TECHNIQUES

1. Offshore Future Flow Structure Combined with Offshore Escrow Account

Definition:

A written document, such as a deed or a release or trustee arrangement, sealed and delivered to a third party, i.e. a person not party to the instrument, to be held by such third party until the fulfilment of certain conditions and then to be delivered by him to the other party to take effect. If the following criteria are satisfied subject to consideration of the additional factors listed, this technique can reduce or eliminate the transfer risks, mainly in the higher risk country categories.

Criteria:

The escrow account is related to a foreign exchange-earning project and the flows into the escrow account are generated by the project itself and/or by other offshore export receivables.

The escrow account is held offshore, i.e. located outside of the country of the project where there are very limited, transfer or other country risks (i.e. in a High Income OECD country or High Income Euro Area country).

The escrow account is located in a first class bank, which is not directly or indirectly controlled by interests of the obligor or by the country of the obligor.

The funding of the account is secured through long-term or other appropriate contracts.

The combination of the sources of revenues (i.e. generated by the project itself and/or the other sources) of the obligor flowing through the account are in hard currency and can reasonably be expected to be collectively sufficient for the service of the debt for the entire duration of the credit, and come from one or more creditworthy foreign customers located in better risk countries than the country in which the project is located (i.e. normally High Income OECD countries or High Income Euro Area countries).

The obligor irrevocably instructs the foreign customers to pay directly into the account (i.e. the payments are not forwarded through an account controlled by the obligor or through its country).

The funds which have to be kept within the account are equal to at least six months of debt service. Where flexible repayment terms are being applied under a project finance structure, an amount equivalent to the actual six months debt service under such flexible terms are to be kept within the account; this amount may vary over time depending on the debt service profile.

The obligor has restricted access to the account (i.e. only after payment of the debt service under the credit).

The revenues deposited in the account are assigned to the lender as direct beneficiary, for the entire life of the credit.

The opening of the account has received all the necessary legal authorisations from the local and any other appropriate authorities.

The escrow account and contractual arrangements may not be conditional and/or revocable and/or limited in duration.

Additional factors to be taken into consideration:

The technique applies subject to a case-by-case consideration of the above characteristics and, inter alia, with regard to:

the country, the obligor (i.e. either public or private), the sector, the vulnerability in relation to the commodities or services involved, including their availability for the entire duration of the credit, the customers;

the legal structures, e.g. whether the mechanism is sufficiently immune against the influence of the obligor or its country;

the degree to which the technique remains subject to government interference, renewal or withdrawal;

whether the account would be sufficiently protected against project related risks;

the amount which will flow into the account and the mechanism for the continuation of appropriate provision;

the situation with regard to the Paris Club (e.g. possible exemption);

the possible impact of country risks other than the transfer risk;

the protection against the risks of the country where the account is located;

the contracts with the customers, including their nature and duration; and

the global amount of the expected foreign earnings in relation to the total amount of the credit.

Impact on the MPR

The application of this country risk mitigation technique may result in a one category improvement in the applicable country risk classification for the transaction, except for transactions in Country Risk Category 1.

1. Local Currency Financing

Definition:

Contract and financing negotiated in convertible and available local, other than hard, currencies and financed locally that eliminates or mitigates the transfer risk. The primary debt obligation in local currency would, in principle, not be affected by the occurrence of the first two country credit risks.

Criteria:

The ECA liability and claims payment or the payment to the Direct Lender are expressed/made throughout in local currency.

The ECA is normally not exposed to the transfer risk.

In the normal course of events, there will be no requirement for local currency deposits to be converted into hard currency.

The borrower’s repayment in his own currency and in his own country is a valid discharge of the loan obligation.

If a borrower’s income is in local currency the borrower is protected against adverse exchange rate movements.

Transfer regulations in the borrower’s country should not affect the borrower’s repayment obligations, which would remain in local currency.

Additional factors to be taken into consideration:

The technique applies on a selective basis in respect of convertible and transferable currencies, where the underlying economy is sound. The Participant ECA should be in a position to meet its obligations to pay claims expressed in its own currency in the event that the local currency becomes either non-transferable or non-convertible after the ECA takes on liability. (A Direct Lender would however carry this exposure.)

Impact on the MPR

The application of this risk mitigation technique may result in a discount of no more than 20 % to the country credit risk portion of the MPR (i.e. a local currency factor [LCF] with a value of no more than 0,2).

BUYER RISK CREDIT ENHANCEMENTS

The following table provides definitions of the buyer risk credit enhancements that may be applied, along with their maximum impact on the applicable MPRs. For transactions subject to country risk category 1–7 MPRs, the maximum CEF used in the MPR formula is stipulated; for market benchmark transactions, the maximum discount to the applicable Market Benchmark MPR is stipulated

For a Market Benchmark Transaction, the premium rate resulting from the application of buyer risk credit enhancements may not be lower than the applicable Minimum Actuarial Premium.

.

Credit EnhancementDefinitionMaximum CEF (Country Risk Category 1–7)Maximum Discount (Market Benchmark)Assignment of Contract Proceeds or Receivables

In the event a borrower has contracts with strong off-takers, whether offshore or local, a legally enforceable assignment of the contract provides rights to enforce the borrower’s contracts and/or make decisions under major contracts in the place of the borrower after a default under the loan. A direct agreement with a third party in a transaction (a local government agency in a mining or energy transaction) allows Lenders to approach a government to seek remedies for expropriation or other violation of contractual obligations related to the transaction.

An existing company operating in a difficult market or sector may have receivables related to the sale of production with a company or companies located in a more stable environment. Receivables would generally be in a hard currency but may not be the subject of a specific contractual relationship. Assignment of these receivables could provide asset security in the accounts of the Borrower, giving the Lender a preferential treatment in the cash flow generated by the Borrower.

0,10N/A

Asset Based Security

Control of an asset shown by:

(1) mortgage on very mobile and valuable piece of property; and

(2) property that has entire value in itself.

An asset based security is one that can be reacquired with relative ease such as a locomotive, medical equipment or construction equipment. In valuing such a security, the ECA should take into consideration the legal ease of recovery. In other words, there is more value when the security interest in the asset is perfected under an established legal regime and less value where the legal ability to recover the asset is questionable. The precise value of an asset-based security is set by the market, with the relevant market being deeper than a local market because the asset can be moved to another jurisdiction. NOTE: The application of an asset based security credit enhancement for transactions subject to country risk category 1–7 MPRs applies to the buyer risk, where the asset based security is held internally within the country in which the transaction is domiciled.

0,2515 %Fixed Asset SecurityA fixed asset security is most typically component equipment which may be constrained by its physicality such as turbine or manufacturing machinery integrated into an assembly line. The intent and value of the fixed asset security is to provide the ECA with more leverage over the use of the asset in recouping losses in the event of default. The value of a fixed asset security varies dependent on economic, legal, market and other factors.0,1510 %Escrow AccountEscrow accounts involve debt service reserve accounts held as security for the lenders or other forms of cash receivable accounts held as security for the lenders by a party not controlled or sharing common ownership with the buyer/obligor. The escrowed amount must be deposited or escrowed in advance. The value of such security is nearly always 100 % of the nominal amount in such cash accounts. Permits greater control over use of cash, ensures that debt is serviced before discretionary spending. NOTE: The application of an escrow account credit enhancement for transactions subject to country risk category 1–7 MPRs applies to the buyer risk, where the escrow account is held internally within the country in which the transaction is domiciled. Cash security significantly diminishes the risk of default for the covered instalments.escrowed amount as % of credit up to a maximum of 0,10escrowed amount as % of credit up to a maximum of 10 %

Annex

ANNEX XIII

CHECKLIST OF DEVELOPMENTAL QUALITY

CHECKLIST OF DEVELOPMENTAL QUALITY OF AID FINANCED PROJECTS

A number of criteria have been developed in recent years by the DAC to ensure that projects in developing countries that are financed totally or in part by Official Development Assistance (ODA) contribute to development. They are essentially contained in the:

DAC Principles for Project Appraisal, 1988;

DAC Guiding Principles for Associated Financing and Tied and Partially Untied Official Development Assistance, 1987; and

Good Procurement Practices for Official Development Assistance, 1986. Of these, the DAC Principles for Project Appraisal and the Good Procurement Practices for Official Development Assistance were, together with several other principles or good practices the DAC produced, published together in the Development Assistance Manual, DAC Principles for Effective Aid (DAM) in 1992.

CONSISTENCY OF THE PROJECT WITH THE RECIPIENT COUNTRY’S OVERALL INVESTMENT PRIORITIES (PROJECT SELECTION)

Is the project part of investment and public expenditure programmes already approved by the central financial and planning authorities of the recipient country?

(Specify policy document mentioning the project, e.g. public investment programme of the recipient country.)

Is the project being co-financed with an international development finance institution?

Does evidence exist that the project has been considered and rejected by an international development finance institution or another DAC Member on grounds of low developmental priority?

In the case of a private sector project, has it been approved by the government of the recipient country?

Is the project covered by an intergovernmental agreement providing for a broader range of aid activities by the donor in the recipient country?

PROJECT PREPARATION AND APPRAISAL

Has the project been prepared, designed and appraised against a set of standards and criteria broadly consistent with the DAC Principles for Project Appraisal from paragraphs 91–162 of the DAM? Relevant principles concern project appraisal under:

a)

Economic aspects (paragraphs 120 to 128 DAM).

b)

Technical aspects (paragraph 112 DAM).

c)

Financial aspects (paragraphs 113 to 119 DAM).

In the case of a revenue producing project, particularly if it is producing for a competitive market, has the concessionary element of the aid financing been passed on to the end-user of the funds? (paragraph 115 DAM).

a)

Institutional assessment (paragraphs 130 to 134 DAM).

b)

Social and distributional analysis (paragraphs 137 to 147 DAM).

c)

Environmental assessment (paragraphs 145 to 147 DAM).

PROCUREMENT PROCEDURES

What procurement mode will be used among the following? (For definitions, see Principles listed in Good Procurement Practices for ODA from paragraphs 409–429 of the DAM).

a)

International competitive bidding (paragraphs 411 and 419–429 DAM: Minimum conditions for effective international competitive bidding).

b)

National competitive bidding (paragraph 412 DAM).

c)

Informal competition or direct negotiations (paragraphs 413–414 DAM).

Is it envisaged to check price and quality of supplies (paragraph 153 DAM)?

Annex

ANNEX XIV

LIST OF DEFINITIONS

For the purpose of the Arrangement:

a)Commitmentany statement, in whatever form, whereby the willingness or intention to provide official support is communicated to the recipient country, the buyer, the borrower, the exporter or the financial institution.b)Common Linean understanding between the Participants to agree, for a given transaction or in special circumstances, on specific financial terms and conditions for official support. The rules of an agreed Common Line supersede the rules of the Arrangement only for the transaction or in the circumstances specified in the Common Line.c)Concessionality Level of Tied Aidin the case of grants the concessionality level is 100 %. In the case of loans, the concessionality level is the difference between the nominal value of the loan and the discounted present value of the future debt service payments to be made by the borrower. This difference is expressed as a percentage of the nominal value of the loan.d)Decommissioningclosing down or dismantling of a nuclear power plant.e)Export Contract Valuethe total amount to be paid by or on behalf of the purchaser for goods and/or services exported, i.e. excluding local costs as defined hereafter; in the case of a lease, it excludes the portion of the lease payment that is equivalent to interest.f)Final Commitmentfor an export credit transaction (either in the form of a single transaction or a line of credit), a final commitment exists when the Participant commits to precise and complete financial terms and conditions, either through a reciprocal agreement or by a unilateral act.g)Initial Fuel Loadthe initial fuel load shall consist of no more than the initially installed nuclear core plus two subsequent reloads, together consisting of up to two-thirds of a nuclear core.h)Interest Rate Supportan arrangement between a government and banks or other financial institutions which allows the provision of fixed rate export finance at or above the CIRR.i)Line of Credita framework, in whatever form, for export credits that covers a series of transactions which may or may not be linked to a specific project.j)Local Costsexpenditure for goods and services in the buyer’s country that are necessary either for executing the exporter’s contract or for completing the project of which the exporter’s contract forms a part. These exclude commission payable to the exporter’s agent in the buying country.k)Market Benchmark Transactiontransaction involving ultimate obligors/guarantors in Category 0 countries, High Income OECD countries and High Income Euro Area countries.l)Minimum Actuarial Premiumis the annualised average default rate (derived from cumulative default rates published by the main Accredited CRAs) for a given rating and total term (WAL of the whole transaction) adjusted by an assumed loss given default and a costs loading factor as per agreed conventions by the Participants.m)Name Specific Bond or CDSa Name Specific Bond or CDS is limited to those market benchmark instruments that belong to the exact identical obligor/guarantor as in the transaction being supported.n)Pure Coverofficial support provided by or on behalf of a government by way of export credit guarantee or insurance only, i.e. which does not benefit from official financing support.

o)Related Entity

Related Entity references are benchmark instruments of a related borrower rather than the exact identical borrower in the supported transaction. In the case where the obligor has no quoted bonds or CDSs, and there exists within the obligor’s organisational structure a parent, subsidiary or sister company with Name Specific Bonds or CDSs outstanding in the market, then with regard to Article 23 c), those Name Specific Bonds or CDSs may be used as if they had been issued by the obligor itself if:

The parent, subsidiary, or sister company has the same issuer CRA rating as the obligor/guarantor; or

All of the following criteria are met:

i.

The Participant’s internal rating of the obligor/guarantor corresponds with the CRA rating of the related entity.

ii.

The obligor/guarantor is the main operating company of the parent/holding, being a key and integral part of the group’s business.

iii.

The CRA rating is based on the core business of the group.

iv.

The obligor/guarantor provides a significant part of the group’s earnings by providing either some of the group’s core products/services to core clients or it owns and operates a major portion of the parent’s assets.

v.

The sale of the obligor/guarantor from the group is very hard to conceive, and the disposal would significantly alter the overall shape of the group.

vi.

A default of the obligor/guarantor would constitute a huge reputational risk to the group, damage its franchise and could threaten its viability.

vii.

A high level of management and operational integration exists where capital and funding is typically provided by the parent company or a finance subsidiary via intercompany loans and where parent support is unquestioned.

p)Repayment Termthe period beginning at the starting point of credit, as defined in this Annex, and ending on the contractual date of the final repayment of principal.q)Starting Point of Credit

Parts or components (intermediate goods) including related services: in the case of parts or components, the starting point of credit is not later than the actual date of acceptance of the goods or the weighted mean date of acceptance of the goods (including services, if applicable) by the buyer or, for services, the date of the submission of the invoices to the client or acceptance of services by the client.

Quasi-capital goods, including related services – machinery or equipment, generally of relatively low unit value, intended to be used in an industrial process or for productive or commercial use: in the case of quasi-capital goods, the starting point of credit is not later than the actual date of acceptance of the goods or the weighted mean date of acceptance of the goods by the buyer or, if the exporter has responsibilities for commissioning, then the latest starting point is at commissioning, or for services, the date of the submission of the invoices to the client or acceptance of the service by the client. In the case of a contract for the supply of services where the supplier has responsibility for commissioning, the latest starting point is commissioning.

Capital goods and project services – machinery or equipment of high value intended to be used in an industrial process or for productive or commercial use:

In the case of a contract for the sale of capital goods consisting of individual items usable in themselves, the latest starting point is the actual date when the buyer takes physical possession of the goods, or the weighted mean date when the buyer takes physical possession of the goods.

In the case of a contract for the sale of capital equipment for complete plant or factories where the supplier has no responsibility for commissioning, the latest starting point is the date at which the buyer is to take physical possession of the entire equipment (excluding spare parts) supplied under the contract.

If the exporter has responsibility for commissioning, the latest starting point is at commissioning.

For services, the latest starting point of credit is the date of the submission of the invoices to the client or acceptance of service by the client. In the case of a contract for the supply of services where the supplier has responsibility for commissioning, the latest starting point is commissioning.

Complete plants or factories – complete productive units of high value requiring the use of capital goods:

In the case of a contract for the sale of capital equipment for complete plant or factories where the supplier has no responsibility for commissioning, the latest starting point of credit is the date when the buyer takes physical possession of the entire equipment (excluding spare parts) supplied under the contract.

In case of construction contracts where the contractor has no responsibility for commissioning, the latest starting point is the date when construction has been completed.

In the case of any contract where the supplier or contractor has a contractual responsibility for commissioning, the latest starting point is the date when he has completed installation or construction and preliminary tests to ensure it is ready for operation. This applies whether or not it is handed over to the buyer at that time in accordance with the terms of the contract and irrespective of any continuing commitment which the supplier or contractor may have, e.g. for guaranteeing its effective functioning or training local personnel.

Where the contract involves the separate execution of individual parts of a project, the date of the latest starting point is the date of the starting point for each separate part, or the mean date of those starting points, or, where the supplier has a contract, not for the whole project but for an essential part of it, the starting point may be that appropriate to the project as a whole.

For services, the latest starting point of credit is the date of the submission of the invoices to the client or the acceptance of service by the client. In the case of a contract for the supply of services where the supplier has responsibility for commissioning, the latest starting point is commissioning.

r)Tied Aid

aid which is in effect (in law or in fact) tied to the procurement of goods and/or services from the donor country and/or a restricted number of countries; it includes loans, grants or associated financing packages with a concessionality level greater than zero percent.

This definition applies whether the tying is by formal agreement or by any form of informal understanding between the recipient and the donor country, or whether a package includes components from the forms set out in Article 32 of the Arrangement that are not freely and fully available to finance procurement from the recipient country, substantially all other developing countries and from the Participants, or if it involves practices that the DAC or the Participants consider equivalent to such tying.

s)Untied Aidaid which includes loans or grants whose proceeds are fully and freely available to finance procurement from any country.t)Weighted Average Life of the Repayment Periodthe time that it takes to retire one-half of the principal of a credit. This is calculated as the sum of time (in years) between the starting point of credit and each principal repayment weighted by the portion of principal repaid at each repayment date.

Annex

ANNEX XV

COMMERCIAL INTEREST REFERENCE RATE (CIRR) PROVISIONS

CHAPTER I

General provisions

1. CONSTRUCTION OF CIRRs

(a) Each Participant wishing to establish a CIRR shall initially select one of the following two base rate systems for its national currency:

(1) three-year government bond yields for a repayment term of up to and including five years; five-year government bond yields for over five and up to and including eight and a half years; and seven-year government bond yields for over eight and a half years; or

(2) five-year government bond yields for all maturities.

Exceptions to the base rate system shall be agreed by the Participants.

(b) CIRRs shall be set at a fixed margin of 100 basis points above each Participant’s base rate unless Participants have agreed otherwise.

(c) Other Participants shall use the CIRR set for a particular currency should they decide to finance in that currency.

(d) A Participant may change its base-rate system after giving six months’ advance notice and with the counsel of the Participants.

(e) A Participant or a non-Participant may request that a CIRR be established for the currency of a non-Participant. In consultation with the interested non-Participant, a Participant or the Secretariat on behalf of that non-Participant may make a proposal for the construction of the CIRR in that currency using Common Line procedures in accordance with Articles 56 to 61.

1. VALIDITY OF CIRRs

The interest rate applying to a transaction shall not be fixed for a period longer than 120 days. A margin of 20 basis points shall be added to the relevant CIRR if the terms and conditions of the official financing support are fixed before the contract date.

1. APPLICATION OF CIRRs

a)

Where official financing support is provided for floating rate loans, banks and other financing institutions shall not be allowed to offer the option of the lower of either the CIRR (at time of the original contract) or the short-term market rate throughout the life of the loan.

b)

In the event of a voluntary, early repayment of a loan of or any portion thereof, the borrower shall compensate the government institution providing official financing support for all costs and losses incurred as a result of such early repayment, including the cost to the government institution of replacing the part of the fixed rate cash inflow interrupted by the early repayment.

CHAPTER II

Specific provisions

1. CONSTRUCTION OF CIRRs FOR TRANSACTIONS UNDER ANNEX II AND ANNEX IV OF THE ARRANGEMENT

a)

The applicable CIRRs for official financing support provided in accordance with the provisions of the Sector Understandings on Export Credits for Nuclear Power Plants (Annex II) and for Renewable Energy, Climate Change Mitigation and Adaptation, and Water Projects (Annex IV) are constructed using to the following base rates and margins:

For new nuclear power plants, Article 1 a) 1) of Annex II refers. For Annex IV, this includes new large hydro-power projects, Appendix II Project Class A, and Appendix III Adaptation Projects.

For new nuclear power plants, Articles 1 a) 2) to 4) of Annex II refers. For Annex IV, this includes all projects not covered in footnote 1 above.

Repayment Term (years)New nuclear power stations and Annex IV projects with long construction periodsAll other contracts

Base Rate

(Government bonds)

Margin(bps)

Base Rate

(Government bonds)

Margin(bps)< 11Relevant CIRR in accordance with Chapter I, Article 1 of this Annex XV11 to 127 years1007 years100138 years1207 years120149 years1208 years120159 years1208 years1201610 years1259 years1201710 years1309 years1201810 years13010 years120

b)

The currencies that are eligible for official financing support are those which are fully convertible and for which data are available to construct the minimum interest rates mentioned in Article 4 a) above, and in Article 1 of this Annex XV for repayment terms less than 11 years.

1. CONSTRUCTION OF CIRRs FOR TRANSACTIONS UNDER ANNEX V AND ANNEX VI OF THE ARRANGEMENT

A Participant providing official financing support for fixed rate loans in accordance with the provisions of the Sector Understandings for Rail Infrastructure (Annex V) or the Terms and Conditions Applicable to Project Finance Transactions (Annex VI): shall apply, as minimum interest rates:

a)

For repayment terms of up to and including 12 years, the relevant CIRR in accordance with Article 1 of this Annex XV.

b)

For repayment terms in excess of 12 years, the relevant CIRRs constructed in accordance with Article 1 of this Annex XV, to which a surcharge of 20 basis points shall be added for all currencies.

CHAPTER III

Operational provisions for the communication of minimum interest rates (CIRRs)

1. COMMUNICATION OF MINIMUM INTEREST RATES

a)

CIRRs for currencies that are determined according to the provisions of Chapter I of this Annex XV shall be sent by means of instant communication at least monthly to the Secretariat for circulation to all Participants.

b)

Such notification shall reach the Secretariat no later than five days after the end of each month covered by this information. The Secretariat shall then inform immediately all Participants of the applicable rates and make them publicly available.

1. EFFECTIVE DATE FOR APPLICATION OF INTEREST RATES

Any changes in the CIRRs shall enter into effect on the fifteenth day after the end of each month.

1. IMMEDIATE CHANGES IN INTEREST RATES

When market developments require the notification of an amendment to a CIRR during the course of a month, the amended rate shall be implemented 10 days after notification of this amendment has been received by the Secretariat.